News / Economy

IMF Lifts Suspension of Funds to Malawi

FILE - International Monetary Fund Managing Director Christine Lagarde is greeted by Malawi’s President, Joyce Banda, on arrival at Kamuzu Palace in Lilongwe on her three-day official visit to Malawi, Jan. 4, 2013.
FILE - International Monetary Fund Managing Director Christine Lagarde is greeted by Malawi’s President, Joyce Banda, on arrival at Kamuzu Palace in Lilongwe on her three-day official visit to Malawi, Jan. 4, 2013.
Lameck Masina
The International Monetary Fund has resolved to immediately disburse about $20 million in suspended funding to Malawi. The IMF imposed the suspension last October pending investigations of a scandal in which millions of dollars in public funds were looted from government coffers. Although government authorities are happy with the IMF’s change of heart, commentators warn that this does not necessarily mean all is well on the country’s economic front.
 
The decision to release the funds was made by the IMF at a meeting in Washington on Friday after an extended review of Malawi's finances.
 
IMF Deputy Managing Director and acting chair Naoyuki Shinohara said the funds were released because, “Malawi’s macroeconomic performance under the IMF-supported program has remained broadly satisfactory," and that policy reforms initiated in May of last year are showing positive results.
 
However, he acknowledged that the recent fraud and misappropriation of substantial amounts of public funds and the associated loss of financial aid have negatively affected the country's financial outlook.
 
Revelations of corruption led the country's key donors to withhold millions of dollars in budget support and to demand that the Malawi government investigate and prosecute those involved in stealing state funds.
 
Shinohara said that to restore confidence in the management of its economy, it will be important for the Malawi government to investigate the fraud thoroughly and address the weaknesses in public financial management exposed by the fraud.
 
Malawi’s finance minister, Maxwell Mkwezalamba, told a news conference in Blantyre that the release of the IMF funds will encourage other donors who have withheld aid to resume funding.
 
“This is a green light to our development partners to continue assisting us. And this becomes particularly important for the CABS, the Common Approach to Budgetary Support, that had decided to delay the disbursement of budget support on the account of the looting on government resources, so there is already indication that the CABS [donors] group will come forward to support Malawi,” said Mkwezalamba.
 
Mabvuto Bamusi, an economic and social commentator, said that despite the release of IMF funds, Malawi cannot be complacent.
 
“There is a lot of caution that needs to be taken, and one of the cautions is that the government at Lilongwe should avoid being overexcited and pretending that everything is back to normal because we still have scenario where the cost of living is still very high and that, cannot simply being addressed by the $20 million from the donor community,” said Bamusi.
 
Bamusi also said that unless the Malawi government addresses issues such as drug shortages in hospitals, dilapidated roads, and problems in the procurement of school materials, it still would be a fallacy to talk about economic normality.
 
He also pointed out that whether or not some of the other donors who withheld aid will release it is still uncertain; just because the IMF has done so does not guarantee anything.
 
Malawi is only four months away from general elections, and Bamusi thinks it likely many individual donors will take a wait and see approach.

You May Like

Video Miami Cubans Divided on New US Policy

While older, more conservative Cuban Americans have promoted anti-Castro political movement for years, younger generations say economically, it is time for change More

2014 Sees Dramatic Uptick in Boko Haram Abductions

Militants suspected in latest mass kidnapping of over 100 people in Gumsuri, Nigeria on Sunday More

Video Cuba Deal Is Major Victory for Pope

Role of Francis hailed throughout US, Latin America - though some Cuban-American Catholics have mixed feelings More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8143
JPY
USD
119.23
GBP
USD
0.6390
CAD
USD
1.1596
INR
USD
63.304

Rates may not be current.